Verizon to Acquire Stake in AwesomenessTV
DreamWorks Animation remains the largest stakeholder in the digital media venture.
In a move to push further into the digital video space, Verizon has agreed to purchase a 24.5 percent stake in AwesomenessTV, the teen- and tween-skewing online video producer owned by DreamWorks Animation and Hearst.
The deal, which values ATV at $650 million, will also see Verizon team with the media company to create a short-form mobile video service featuring online talent.
DWA, which acquired ATV in 2013, remains the company's largest shareholder with a 51 percent ownership stake. Hearst, which acquired a stake in the business in 2014, will continue to own a 24.5 percent share.
DWA CEO Jeffrey Katzenberg called the deal "a transformational step" for the mobile video landscape. He added: "This agreement is clearly impactful for AwesomenessTV — with annual revenues expected to more than double in the first 12 months of content delivery — and even more exciting is the expansion of our relationship with Verizon, one of the world's most powerful marketers and content distributors, and their commitment to explore with us this incredible opportunity."
ATV was founded by producer and director Brian Robbins as a channel on YouTube with youth-oriented shows and videos. The company, which also operates a network of YouTube stars, has grown to encompass digital production across platforms, including a recent push into feature-length films, as well as talent management through the acquisition of Big Frame.
Now, ATV will add to its business with a new mobile video offering launched in partnership with Verizon. Robbins tells The Hollywood Reporter that the currently unnamed service will be an entirely new brand focused on creating short-form videos for the 18-34 demographic. "What's exciting about this is that we're going to be reaching out to the Hollywood community," adds Robbins. "There's going to be a lot of announcements of some really talented people that we're going to tell great stories with."
The mobile video service will launch as a part of Verizon's go90 app, a mobile offering that Verizon has been spending heavily on since its roll out last year, and will be available exclusively on Verizon platforms in the U.S. ATV will retain the rights to sell the content internationally. Verizon will fund the project through a multiyear agreement with ATV.
The service will feature some transactional video content, a departure from go90, which is free and ad-supported. Robbins says he expects Verizon to experiment with different models, including transactional videos as well as subscriptions.
The deal furthers Verizon's relationship with ATV, which it had partnered with to bankroll a series of original, exclusive projects for go90.
Robbins, who will continue to run the company as CEO alongside president Brett Bouttier, says the expansion of the relationship signals the growing importance of mobile for his business. "When I started the company almost four years ago, 40 percent of our views were on mobile. Today over 80 percent of our views are on mobile," he explains. "We don't see that stopping. To be aligned with the biggest phone carrier in the world, that has a lot of audience at their fingertips, it's a perfect partner for what we're doing."
Marni Walden, Verizon executive vp and president of product and new business innovation, added that ATV has "zeroed in" on programming for Gen Z and millennial audiences. "The content AwesomenessTV has produced for go90 has exceeded all our expectations with shows such as Guidance and Top Five Live," she added. "That's why we want to be in the AwesomenessTV business."
LionTree Advisors advised Verizon during the transaction and J.P. Morgan advised DreamWorks Animation. The transaction is expected to close within the next 60 days.